A Senate Banking Committee hearing focused on illicit finance and terrorism gave a window into how lawmakers plan to shape potential legislation focused on digital assets.

In a hearing on Tuesday titled "An Update from the Treasury Department: Countering Illicit Finance, Terrorism and Sanctions Evasion," senators aired concerns over bad actors' use of digital assets, which has been a point of contention over the past year.

"All these bad actors — North Korea, Russia, terrorist groups like Hamas — are turning to crypto because they've seen the ads and bought the hype," said Senate Banking Committee Chair Sherrod Brown, D-Ohio, on Tuesday. "They're using it because they know it's a workaround. They know it's easier to move money in the shadows without safeguards like Know Your …